7 rules for building wealth in your 20s

When you're in your 20s, it might seem like you have plenty of time to save and invest. But time is more fleeting than you think. Building wealth when you're paying off student loan debt or starting a career isn't easy, but it'll be worth the effort later on. If you're ready to buckle down and increase your net worth, here are seven things to do before you turn 30.

1. Make the Most of Your Employer's Retirement Plan

If you've got access to a 401(k) or a similar plan through your job, you have a great opportunity to build your net worth. At the very least, it's a good idea to contribute enough of your salary to earn the company match. It's estimated that employees who don't get the match lose out on more than $42,000 in savings over the course of their careers.

2. Extend Your Savings With Tax-Advantaged Accounts

If your employer doesn't offer a 401(k) plan, you can build your nest egg by contributing to other kinds of retirement accounts. For example, in 2015, you can save up to $5,500 in an IRA. If you're enrolled in a high deductible health insurance plan, you can save another $3,350 in an individual health savings account, or $6,650 if you've got family coverage.

3. Get the Credit You Deserve

When you're in your 20s, you're probably not bringing home a huge paycheck. That can actually work to your advantage during tax season. For example, if you've been saving in a retirement account, you might qualify for the saver's credit. That's worth up to $1,000 for single filers and twice that amount for married couples.

It's also possible to qualify for the Earned Income Credit if your income is on the lower end of the spectrum. Credits reduce the taxes you owe dollar for dollar. So the more credits you snag, the more money you'll save.

4. Master the Art of Budgeting

A budget is one of the simplest and most powerful tools you can use to build wealth in your 20s and beyond. It's a plan for how you're going to spend your money each month. Knowing what you've got coming in and going out can help you put a lid on nonessential spending so you can put that money to better use elsewhere.

5. Attack Your Student Loan Debt

Student loan debt is a roadblock for many 20-somethings, but you don't have to let it derail your financial goals. Refinancing your loans can reduce the amount of money you spend on interest so you can pay off your debt more quickly.

6. Don't Be Afraid to Take Risks

If you're new to investing you might be tempted to play it safe. But you could be shortchanging yourself. When you've got at least 40 years left before retirement, you've got time to take a gamble on stocks or mutual funds. You don't need to play it safe with bond-heavy asset allocation.

7. Be Prepared for Bumps in the Road

Once you're out in the real world, you need to be prepared for any financial hiccups that might come along. Starting an emergency fund can help you get over any hurdles, like a major car repair or an unexpected job loss. It's okay to start small if you need to, but it's a good idea to build up a cushion equal to 3-6 months of living expenses. And remember, you can always increase your savings rate with every raise you get.

Final Word

Unless you land a six-figure job right out of school or start a company that becomes successful overnight, building wealth in your 20s is probably going to take some work. But following the road map we've laid out can make it easier to reach your destination.